Thursday, April 2, 2009

One giant leap for Time Warner Cable....backwards

Aaaarrrrrrrrrrggghh!

That about sums up my feelings for Time Warner Cable right now. Last year Time Warner Cable announced they would be conducting an experiment in bandwidth caps for their high speed Internet access in Beaumont, Texas. I thought that was a bad idea and setting a dangerous tone for the rest of TWC's customers, but not much was made of it and it sort of faded from view.

Now Time Warner Cable, a new company spun off from the old Time Warner conglomerate, has announced its intention to implement bandwidth caps in three more test markets: Austin, TX, San Antonio, TX, and Rochester, NY. All three markets conspicuously have no viable alternative to TWC for high-speed cable Internet access.

Comcast cable tried this last year as well and initially got the smack-down from the FCC. In the end though they kissed and made up by setting the top-most tier cap at 250GB / month which people vary rarely exceed at this time.

Being one of those who regularly uses the Internet a healthy amount I find myself in an incredible imposition. To be fair I've never liked Time Warner. Their service is so-so and their cable was overpriced and low quality. Even now when I watch "high definition" TV at someone's house with TWC and compare it to the HD TV that I get over the air for free it's plainly noticeable that TWC compresses the crap out of their HD and while it's still arguably better quality than SD, it's nowhere near the quality of OTA HD. The only benefit is having so many more HD channels with TWC.

I got to thinking, "Are the only ones really impacted just us geeks who use the Internet 20 hours out of the day?" and I've realized that no, not just geeks are affected. Consider the following Internet-based activities and see how many apply to you or your family:

Watching YouTube (or Break.com or Vimeo.com) videos

Watching Hulu (or ABC.com or CBS.com or NBC.com) tv shows

Playing games online with your XBox Live, Wii, PS 3, or computer

Surfing the web on "rich content" pages - those with lots of pictures, flash animations, advertisements, or music

Working from home via VPN (your company probably doesn't pay for your Internet usage)

Downloading large OS updates (like service packs) for your computer (Windows, Mac, and Linux all do this now)

Using an Internet-based telephone service (sometimes called "Digital Phone" or "VoIP")

Most items on that list are not uncommon and arguably many of them are behaviors that are gaining popularity such as online gaming.

Consider also that when you're connected to the Internet you have a public IP address and that address is almost constantly bombarded by Internet denizens and bots that are trying to gain control of your system (you do have a firewall don't you?). Those attacks still take up bandwidth and over time it can be significant. Is TWC going to count that against your usage as well? If so, that's just plain robbery.

So I cannot fathom why Time Warner Cable would, at a time when many people are struggling to make ends meet and willing to reduce or cut out unnecessary expenses, increase the potential cost to customers who use a decent amount of Internet bandwidth doing the above list of things. Add to that the fact that the Obama administration just signed into law a huge $7.2 billion stimulus package for broadband and TWC's move can only be construed as blind corporate greed.

What are the limits you ask? Here's the breakdown as it's been discussed:

There will be four speed tiers: 5, 10, 20, and 40Mbps

The cheapest plans will be $29.95 /month and the most expensive will be $54.95 /month

Overage chages if you exceed your cap will be $1 /GB

There will be an additional "super tier" of 100Mbps later on with no pricing information at this time.

According to TWC's study about 14% of users exceeded their cap and the average overage charge was about $19 /month. Get that? Your bill isn't actually $30 or $55, it's $50 or $75 if you are part of the average user that exceeds your cap? If this is common (and 14% of a 1 million customer market is fairly common in my opinion), then doesn't that suggest that your caps are too low?

An alternative approach suggested elsewhere is for Time Warner Cable to set bandwidth boundaries under which you receive a reward for reducing your bandwidth usage. So for example:

Tom pays $40/month for his TWC High Speed Cable Internet with unlimited bandwidth. If Tom uses 20GB /month or more he gets no discount. However, if he only uses 10-19.999GB /month then he gets a $5 rebate bringing his total to $35/month. This continues on down the tiers:

Usage Range

Incremental Rebate

20+ GB/month

No Rebate

10-19.999 GB/month

$5

5-9.999 GB/month

$10

< 5 GB

$10

This means an infrequent Internet user will pay only $15 /month for access.

TWC has stated that they will roll out a "gas gauge" for customers to determine their usage levels for the three months leading up to the late summer roll-out. This is useful to a point, but unless it's updated very frequently (once per day is not "very frequently") it will be misleading. It also doesn't take into account that usage can fluxuate wildly during a month or from month to month. A "gas gauge" shows me a snapshot in time of my usage, not a history of my usage (like you get with the electric or gas utilities). It brings me back to thinking Internet access is becoming more and more like a utility and should be treated thusly - but that's a post for another time.

Psst, TWC....Sprint tried this cap before with their "Fair and Flexible" plan, it was abandoned very rapidly in favor of unlimited usage plans for a little more money.

While there is no comparable alternative in Rochester, NY to TWC's highest level of residential service (called RoadRunner Turbo) there are a few alternatives that do not have bandwidth caps (yet) though the overall speed is lower: EarthLink High Speed Cable and Frontier High Speed DSL (keep in mind Frontier tried this cap last year and failed public opinion but haven't dismissed the option). I recommend letting TWC know how you feel and use these two competitors to your advantage in convincing TWC to keep you as a customer by getting rid of this ridiculous cap.

Oh and for those thinking of Clearwire wireless broadband, better read the fine print. It seems to imply caps and overage fees of $10 /GB which makes Time Warner Cable look positively saintly!

Update 4/2/2009 12:31 - TWC Clarifying: At this time, there are no plans to put caps on business class service. If you want to look into it, call 1-866-TWC-4BIZ

"Also consider if you don't already know your usage when these caps come into play (and who really does know their usage?) then you will either be overpaying by selecting a tier that has more bandwidth than you need, or you will be going over your cap and being charged up the wazoo. Neither of these scenarios works out for the consumer."

To play devil's advocate here, that's not true. They will be turning on the "gas gauges" this September here in Rochester, and give us three months to see what our usage is. Then we select a tier.